Oct 26, 2026 earnings call — Q3 results and AllDale acquisition
Total revenues increased 5.5% to $603 million.
Revenue $0.6B (est $0.6B) · EPS $1.10 (est $0.85)
Key quotes
"Segment adjusted EBITDA at our coal operations increased 8.6% year over year and 23.1% sequentially."
"Oil and gas royalty revenues were a record $59.8 million and BOE volumes were a record 1.45 million"
"We are pleased to announce a new multiyear coal supply agreement with our largest historical customer, that will allow the mine and nearly 150 mineworkers to return to coal production operations."
Analyst Q&A 4
Metiki deal and Illinois Basin costs
Q (Matthew Key · Texas Capital): Analyst asked for more color on the Metiki supply agreement and what changed. He also asked whether the strong cost performance in the Illinois Basin (ILB) is sustainable or a one-off.
A: Management said the Metiki outcome came from ongoing talks and the customer's need for secure supply tied to data center demand. They said converting to a continuous miner will let them mine higher quality seams and access the export met market, keep the mine open, and should improve results in 2027. On ILB costs they said fourth quarter should be comparable and 2027 should improve because Hamilton was down half the year and they have some excess capacity to grow volumes if the market allows.
"So we are for--you know, we appreciate their you know, their trust in us, and we really are excited to be able to provide opportunities for the miners in that region." — Joseph W. Craft (CEO·CHAIR)
Export upside and logistics constraints
Q (Nathan Martin · Stonox Group): Analyst asked whether export shipments could push volumes above the 35 million ton midpoint and if any operational investments are needed. He also asked about current netbacks and how many tons Metiki could add.
A: Management said no additional investments or operational changes are needed to produce more. They warned of logistical headwinds: barge capacity is very tight and higher ocean freight and barge costs are reducing margins, but if logistical issues clear they could exceed volumes this year maybe by half million or a million tons. On netbacks they said it varies by operation and they prefer not to discuss specifics while negotiating; on Metiki they said the Dominion contracts were 700 thousand Tons next year and they could expand another couple 100 thousand tons and possibly have 150 to 200 tons in the met market.
"So if we can clear up some of the logistical issues, you know, we are pretty confident that we could exceed our volume this year maybe by half million or a million tons." — Joseph W. Craft (CEO·CHAIR)
Pricing, equity income, oil production growth
Q (Mark Reichman · Noble Capital Mark): Analyst asked how pricing for committed 2027 volumes looks versus 2026. He also asked about the equity method income increase (breakdown Davis vs others) and whether $3 million quarterly is still a good distribution expectation. Finally, he asked how much 2027 royalty production will come from existing wells versus new drilling or acquisitions.
A: Management said pricing has been trending up and they expect 2027 revenues to be equal to if not slightly higher on a consolidated basis, with 2028 pricing a bit stronger. On equity investments they said about 85% of the third quarter contribution was from Davis, distributions were strong (8.5 million this quarter, 10.7 million the prior), and they still view $3 million to $4 million per quarter as a reasonable distribution number though earnings will vary. On oil and gas they said they will continue to make acquisitions but even without acquisitions they expect volume growth next year, helped by a full year benefit from the AllDale III and IV acquisition and ongoing reserve work ahead of February guidance.
"We still think as we look at that kind of that $3 million to $4 million per quarter is just a good number to count on." — Cary Marshall (CFO)
Metiki restart, debt, and payout policy
Q (Michael Matheson · Sidoti and Company): Analyst asked whether reopening Metiki changes the carrying value after the Q1 write-down. He asked about the AllDale acquisitions and whether they plan to pay down the new debt or operate at a higher leverage level. He also asked whether the strong distribution coverage raises the chance of a payout increase.
A: Management said restarting Metiki will not change the carrying value on the balance sheet; they will invest in equipment but most assets are mobile and they do not expect further balance sheet adjustments. On the AllDale funding they drew on revolvers and used a new $150 million short-term Minerals facility (18-month) and they do anticipate amortizing that down on a quarterly basis using mineral cash flow while retaining capacity to finance more acquisitions. On the payout they said they will likely keep their powder dry, prioritize reinvestment and debt reduction, and want to maintain a 1.5x coverage ratio or greater before considering a distribution increase.
"But I think right now, we want to stay at the 1.5x coverage ratio or greater." — Joseph W. Craft (CEO·CHAIR)